Woolworths boss Brad Banducci has been threatened with a six-month prison sentence and a fine for failing to answer questions in a heated Senate inquiry into the supermarket’s profits.
Mr Banducci was repeatedly asked at a hearing on supermarket prices to reveal Woolworths’ return on equity, a key measure of the company’s profitability.
Instead, the outgoing CEO, who earned $8.6 million in the last fiscal year, declined to answer questions, focusing on the company’s return on investment.
“We measure return on investment, which we believe is the right way to measure a company’s profitability,” he told the inquiry on Tuesday.
Inquiry chair and Greens senator Nick McKim warned Mr Banducci that failure to answer the question directly could lead to him being held in contempt by the Senate.
‘We are not interested in PR spin. We are not interested in you talking your way through this committee,” said Senator McKim.
Woolworths boss Brad Banducci (pictured) was threatened with contempt of court charges during a Senate hearing
This charge carries a fine of up to $5,000 and a possible prison sentence of six months.
Because the answer was not made public, the investigation was forced to suspend the hearings.
The profit margins of major supermarkets have come under scrutiny during the investigation, with Woolworths and Coles accused of price gouging.
Woolworths made a profit of $1.7 billion after tax in the last financial year.
Senator McKim accused Banducci of manipulating data on the supermarket’s profits.
‘The fact that Woolworths’ return on equity is 26 percent in a year when you made $1.7 billion in profit shows that your company is operating like bandits and is in fact licensed to make money press,” he said.
“You have used this market dominance to put pressure on your suppliers, including farmers, to drive down wages, jeopardize worker safety and drive up prices for your customers.”
Mr Banducci previously denied that Woolworths was price gouging.
The profit margins of major supermarkets, including Woolworths (pictured), have come under scrutiny during the investigation, with Woolworths and Coles accused of price gouging
“It’s very difficult to say there is price gouging,” he said.
“I would respectfully say that this is an incredibly competitive market and that’s good for the consumer.”
Coles and Woolworths make up about two-thirds of the Australian supermarket sector.
Mr Banducci said inflation in the supermarket sector was largely the reason behind skyrocketing prices at the checkout.
“Inflation in the food sector is real and is driven substantially by cost increases at our largest global consumer goods suppliers and the cyclical impact on domestic fresh food markets,” he said.
‘While we at Woolworths are now seeing falling supermarket inflation, we nonetheless understand that many of our customers are under enormous cost-of-living pressures.’
It is one of the last public appearances for Mr Banducci, who announced his resignation from the top job in February after a trainwreck interview with ABC’s Four Corners, where he struggled to answer questions about Woolworths’ market share.
Inquiry chair and Greens senator Nick McKim (pictured) warned Banducci he could face charges after attempting to question him several times
Mr Banducci will step down as CEO at the end of August, ending his eight-year run leading Australia’s largest supermarket.
He had a base salary of $2.6 million, but with bonuses that boosted his total compensation to $8.647 million, the company’s annual report showed.
Coles CEO Leah Weckert will appear before the committee later on Tuesday.
The research comes as a review of the voluntary food and grocery code of conduct, which governs the relationship between supermarkets and suppliers. It is recommended that this code of conduct be made mandatory, with significant financial penalties for violations.